Callaway Golf Company (MODG)
Return on total capital
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -1,253,800 | 179,300 | 224,600 | 244,900 | 245,000 | 239,000 | 235,200 | 252,700 | 284,700 | 263,174 | 266,874 | 230,874 | 466,074 | 486,043 | 477,840 | 209,707 | -80,634 | -68,657 | -96,539 | 113,669 |
| Long-term debt | US$ in thousands | 1,457,900 | 1,461,200 | 1,464,500 | 1,519,200 | 1,518,200 | 1,521,500 | 1,525,400 | 1,529,500 | 1,176,300 | 1,065,900 | 1,067,400 | 1,070,500 | 1,025,300 | 1,049,020 | 1,064,430 | 1,174,990 | 650,564 | 651,011 | 628,851 | 453,774 |
| Total stockholders’ equity | US$ in thousands | 2,407,700 | 3,935,600 | 3,933,500 | 3,887,000 | 3,878,200 | 3,951,900 | 3,932,700 | 3,811,100 | 3,774,300 | 3,806,500 | 3,790,200 | 3,700,500 | 3,682,900 | 3,721,930 | 3,739,460 | 3,612,820 | 675,644 | 688,534 | 624,548 | 759,967 |
| Return on total capital | -32.43% | 3.32% | 4.16% | 4.53% | 4.54% | 4.37% | 4.31% | 4.73% | 5.75% | 5.40% | 5.49% | 4.84% | 9.90% | 10.19% | 9.95% | 4.38% | -6.08% | -5.13% | -7.70% | 9.37% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $-1,253,800K ÷ ($1,457,900K + $2,407,700K)
= -32.43%
Callaway Golf Company's return on total capital has shown variability over the periods analyzed. Initially, from March 31, 2020, to December 31, 2021, the company experienced negative returns on total capital, indicating inefficiency in generating profits relative to the total capital employed. However, starting from March 31, 2021, there was a positive turnaround, with the return on total capital increasing steadily, reaching a peak of 10.19% on September 30, 2021.
Subsequently, the return on total capital fluctuated within a range between 4.31% and 5.75% from March 31, 2022, to December 31, 2022, implying a moderate level of profitability relative to the total capital. However, a significant decline was observed on December 31, 2024, with a sharp drop to -32.43%, indicating a substantial loss in profitability compared to the capital invested.
Overall, despite the fluctuations in returns on total capital, Callaway Golf Company needs to maintain consistency in generating positive returns to ensure efficient utilization of its capital and enhance long-term financial performance. Further analysis of the factors influencing these fluctuations would be essential for strategic decision-making and improving overall financial health.
Peer comparison
Dec 31, 2024